The widening gulf between the global haves and have-nots was starkly revealed last night when the UN announced that while the US was booming in the 1990s more than 50 countries suffered falling living standards.

The UN's annual human development report charted increasing poverty for more than a quarter of the world's countries, where a lethal combination of famine, HIV/Aids, conflict and failed economic policies have turned the clock back.

Highlighting the setbacks endured by sub-Saharan Africa and the countries that emerged from the break-up of the Soviet Union at the end of the cold war, the UN called for urgent action to meet its millennium development goals for 2015.

These include a halving of the number of people living on less than a dollar a day, a two-thirds drop in mortality for the under-fives, universal primary education and a halving of those without access to safe drinking water and improved sanitation.

The report said the 90s had seen a drop from 30% to 23% in the number of people globally living on less than a dollar a day, but the improvement had largely been the result of the progress in China and India, the world's two most populous countries.

Despite some sporadic successes such as Ghana and Senegal, there was little hope of Africa meeting the UN's 2015 development goals; on current trends it would be 2147 before the poorest countries in the poorest continent halved poverty and 2165 before child mortality was cut by two-thirds. Thirty of the 34 countries classified by the UN as "low human development" are in sub-Saharan Africa.

Taking issue with those who have argued that the "tough love" policies of the past two decades have spawned the growth of a new global middle class, the report says the world became ever more divided between the super-rich and the desperately poor.

The richest 1% of the world's population (around 60 million) now receive as much income as the poorest 57%, while the income of the richest 25 million Americans is the equivalent of that of almost 2 billion of the world's poorest people. In 1820 western Europe's per capita income was three times that of Africa's; by the 90s it was more than 13 times as high.

In Norway, top of the UN's league table for human development, life expectancy at birth is 78.7 years, there is 100% literacy and annual income is just under $30,000 (about £18,200). At the other end of the scale, a newborn child in Sierra Leone will be lucky to reach its 35th birthday, has a two in three chance of growing up illiterate and would have an income of $470 a year.

Overall human development, measured by the UN as an amalgam of income, life expectancy and literacy, fell in 21 countries during the 90s. By contrast only four countries suffered falling human development in the 80s.

"Though average incomes have risen and fallen over time, human development has historically shown sustained improvement, especially when measured by the human development index," the report said. "But the 1990s saw unprecedented stagnation, with the HDI falling in 21 countries.

"Much of the decline in the 1990s can be traced to the spread of HIV/AIDS, which lowered life expectancies, and to a collapse in incomes, particularly in the commonwealth of independent states."

The UN said the events of September 11 had created a "genuine consensus" that poverty was the world's problem, but urged the west to abandon the one-size-fits-all liberalisation agenda foisted on poor countries.

Mark Malloch-Brown, administrator of the UN development programme, said many countries in Africa and Latin America held up as examples of how to kickstart development were among the stragglers in the global economy.

"The poster children of the 1990s are among those who didn't do terribly well," he said. "There are structural restraints on development. Market reforms are not enough. You can't just liberalise; you need an interventionist strategy."

The report added that: "Over the past 20 years too much development thinking and practice have confused market-based economic growth with laissez faire."

The west needed to tear down trade barriers, dismantle its lavish subsidy regimes, provide deeper debt relief and double aid from $50bn to $100bn a year. This would provide the resources for investment in the building blocks of development - health, education, clean water and rural roads.

"Poor countries cannot afford to wait until they are wealthy before they invest in their people," said Jeffrey Sachs, special adviser to Kofi Annan, the UN secretary general, on the UN's millennium development goals.

Economic growth alone would not rescue the world from poverty, the report said. "Without addressing issues like malnutrition and illiteracy that are both causes and symptoms of poverty, the goals will not be met.

"The statistics today are shaming: more than 13 million children have died through diarrhoeal disease in the past decade. Each year, over half a million women, one for every minute of the day, die in pregnancy and childbirth. More than 800 million suffer from malnutrition."

It added: "For many countries the 1990s were a decade of despair. Some 54 countries are poorer now than in 1990. In 21, a larger proportion is going hungry.

"In 14, more children are dying before age five. In 12, primary school enrolments are shrinking. In 34, life expectancy has fallen. Such reversals in survival were previously rare."

Matthew Lockwood, head of UK Advocacy Team, ActionAid, said: "The shocking truth is that the poor are getting poorer. Leaders, in rich and poor countries alike, are not taking poverty seriously enough.

"You don't solve this problem by making the leaders of poor countries accountable to their rich-country counterparts. They need to be accountable to their own citizens. Poor people must have a voice.

"We agree with much in the report but we would have liked to see more about grassroots participation."